Analysis of the 2004-05 Budget Bill

Legislative Analyst's Office
February 2004

The California Transportation Commission (CTC) is responsible for adopting
specified multiyear transportation capital outlay programs and allocating funds
appropriated by the Legislature to carry out those programs. The commission is
also responsible for assisting the administration and the Legislature in
developing transportation policies. The major responsibilities of the
commission include:

Adopting biennially: (1) a
State Transportation Improvement Program for capacity-expanding capital
projects to be funded from state and federal funds expected to be
available over a five-year period, and (2) a four-year State Highway
Operations and Protection Program that
includes capital projects that protect and improve the operation and
safety of the highway system.

Allocating funds appropriated
by the Legislature for transportation capital outlay among eligible
projects ready for construction.

Developing and adopting
guidelines for various transportation funding methods, including loaning
of state funds and the issuance of Grant Anticipation Revenue Vehicle
(GARVEE) bonds for projects.

Providing administrative
oversight of specified programs, including the Proposition 116 (1990)
rail bond program and the Traffic Congestion Relief Program (TCRP).

Reporting annually to the
Legislature on policies adopted by the commission, major project
allocations made in the previous year, and significant transportation
issues facing the state.

The CTC consists of nine part-time members appointed by the Governor. In
addition, one member each from the Senate and the Assembly serve as ex-officio
members of the commission.

The CTC is authorized 17 positions in the current year, including three
positions to administer the TCRP. Pursuant to Control Section 4.10 of the
current-year budget and Executive Order D-71-03, the administration is
proposing to reduce the commission's current-year staff from 17 to 13 positions.
For 2004-05, the administration is proposing to eliminate an additional three
positions associated with the proposed repeal of the TCRP. This would leave the
commission with a staff of ten positions.

We recommend that the Legislature withhold action on eliminating three
positions and $256,000 for the Traffic Congestion Relief Program until it
determines the status of the program. Based on that decision, the Legislature
should adjust the commission's staffing level accordingly.

The TCRP, enacted in 2000, provides $4.9 billion to fund 141 specified
projects over multiple years. The CTC is statutorily responsible for providing
administrative oversight for the funding of these projects, including the
development of administrative guidelines, review and approval of project
applications, allocation of state funds, and periodic reporting on program
status. In 2000-01, the commission was provided three positions to handle
TCRP-related workload.

Currently, TCRP projects are in various phases of development and funding.
The Governor proposes to repeal the program in 2004-05 and eliminate the
commission's staff related to the program. If the Legislature decides to repeal
the program, as proposed, thereby eliminating all TCRP workload, the three
positions should be terminated. Alternatively, the Legislature may choose to
keep the program intact or modify the program, with ongoing workload for the
commission. Because the Legislature has yet to make a decision regarding the
program's status, we recommend that it withhold action on the budget proposal
to eliminate the three positions pending that decision. Based on the decision,
the Legislature should adjust the commission's staffing accordingly.

We recommend the Legislature eliminate only two instead of four
positions as proposed in the budget because the proposed reduction would
curtail the commission's ability to carry out its duties. (Augment Item
2600-001-042 by $127,000 and two positions.)

In addition to eliminating the TCRP positions, the budget proposes to make
permanent the current-year reduction of four positions. This would bring the
commission's non-TCRP-related staffing to ten positions, a 29 percent
decrease in staffing for all such activities and duties.

However, there would not be any reduction in the commission's workload. In
fact, in the current and budget years, the commission will have the added
workload of issuing GARVEE bonds and administering the bond program in
accordance with Chapter 862, Statutes of 1999 (SB 928, Burton).
Additionally, if the Legislature concurs with the administration's proposal to
change the accounting of federal fund expenditures by local projects, we think
that the commission should be given responsibilities in the oversight of
Caltrans' projection and management of the cash flow for local projects to
ensure that the delivery of these projects are not jeopardized. (Please see our
discussion in the "Crosscutting Issues" part of this chapter
regarding transportation funding.)

Given the workload, we think that the reduction of four positions is
excessive, and it would hinder the commission's ability to carry out its duties.
Our review of the commission's annual workload shows that a staff of 12, not
including the TCRP staff, is justified. This level would provide essentially
the same level of support the commission has had since the late 1980s.
Accordingly, we recommend that the proposal to eliminate four positions be
rejected, and only two positions be reduced instead. Correspondingly, we
recommend that two positions and $127,000 be restored.